How to Read an Orderbook: Bid, Ask & Market Depth
Learn to read crypto orderbooks like a pro. Understand bids, asks, spread, market depth, liquidity walls, and how to use orderbook data for smarter trade decisions.
Key takeaways
- An orderbook lists all open buy (bid) and sell (ask) orders; the highest bid and lowest ask set the current price, and the gap between them is the spread.
- Market depth shows cumulative order volume at each price level, and a bid side noticeably thicker than the ask side signals more buying pressure.
- Liquidity walls are large order clusters that act as support (bid wall) or resistance (ask wall); when the market absorbs one, it often signals strong directional momentum.
- On Hyperliquid the orderbook updates in real time with sub-second finality, and Dexly streams live orderbook data over WebSocket with colored bid/ask pressure bars.
Bid, Ask & The Spread
An orderbook is a live list of all open buy and sell orders for a trading pair. It is the core data structure that determines price on any exchange.
Bids (Buy Orders)
Listed below the current price. These are traders willing to buy at a specific price. The highest bid is the best price a seller can get right now.
Asks (Sell Orders)
Listed above the current price. These are traders willing to sell at a specific price. The lowest ask is the best price a buyer can get right now.
The Spread
Reading Market Depth
Market depth shows the cumulative volume of orders at each price level. It tells you how much buying or selling pressure exists across the entire orderbook — not just at the best bid/ask.
- Cumulative Size: Each row in the depth chart adds up all orders at that price and below (bids) or above (asks). A steep curve means many orders are concentrated near the current price.
- Depth Chart: The visual representation of bids (left/green) and asks (right/red) as area curves. Where the two curves meet is the current market price.
- Imbalance: If the bid side is significantly thicker than the ask side, there is more buying pressure — and vice versa. This can signal short-term price direction.
Liquidity Walls & Pressure
A "liquidity wall" is a large cluster of orders at a specific price level that acts as support or resistance.
Bid Wall (Support)
A large concentration of buy orders at a price below the market. Acts as a "floor" — the price may struggle to drop past this level because so many buyers are waiting there.
Ask Wall (Resistance)
A large concentration of sell orders above the market price. Acts as a "ceiling" — the price must absorb all that sell pressure before it can move higher.
Absorption
When the market eats through a wall, it signals strong momentum. A broken bid wall often leads to a sharp drop; a broken ask wall leads to a rally.
Pressure Bars
Dexly visualizes bid/ask pressure as colored bars in the orderbook. The width of the bar shows relative order size at each level.
Trade the order book on Dexly
Making Trade Decisions
Orderbook data complements chart analysis. Here's how to use it:
- Entry Timing: Place limit buy orders just above strong bid walls — you get filled near support while the wall absorbs selling pressure.
- Exit Targets: Set take-profit orders just below large ask walls — the price is likely to stall at heavy resistance.
- Slippage Estimation: Check depth before placing large market orders. If the book is thin, use limit orders or TWAP to avoid moving the price against yourself.
- Trend Confirmation: Rising prices with increasing bid depth confirms bullish momentum. Rising prices with thinning bids may signal an exhaustion move.
Spotting Whale Activity
Large traders ("whales") leave footprints in the orderbook. Learning to spot them gives you an edge:
- Sudden Large Orders: A massive order appearing at a specific level may indicate institutional interest at that price.
- Iceberg Orders: Some whales split large orders into smaller visible portions. If a level keeps getting filled but never shrinks, an iceberg order may be present.
- Rapid Cancellations: Large orders that appear and disappear quickly may be spoofing attempts — treat them with caution.
Don't Rely on Orderbooks Alone
Practice on Dexly
The best way to learn orderbook reading is hands-on. Open any trading pair on Dexly and study the live orderbook alongside price action.
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Risk Warning: Trading perpetual futures involves significant risk of loss. Only trade with capital you can afford to lose. Dexly is a non-custodial interface; you are responsible for your own funds and trading decisions.
Frequently Asked Questions
Trade the order book on Dexly